![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |
England and Wales High Court (Commercial Court) Decisions |
||
|
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Stonegate Farmers Ltd v Chucks Farm Ltd [2026] EWHC 742 (Comm) (27 February 2026) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2026/742.html Cite as: [2026] EWHC 742 (Comm) |
||
[New search]
[Context
]
[View without highlighting]
[Printable PDF version]
[Help]
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CIRCUIT COMMERCIAL COURT
Bristol BS1 6GR |
||
B e f o r e :
(Sitting as a judge of the High Court)
____________________
STONEGATE FARMERS LIMITED |
Claimant/Applicant |
|
| - and - |
||
CHUCKS FARM LIMITED |
Defendant/Respondent |
____________________
Charlie Greenwood (instructed by Blacks Law LLP) for the Defendant/Respondent
Hearing date: 4th February 2026
Draft judgment circulated 16th February 2026
____________________
Crown Copyright ©
This judgment was handed down remotely at 10.00am on Friday 27th February 2026 by email to the parties' legal representatives. The claim was heard in private in accordance with CPR 62.10 but after handing down the parties agreed to the publication of the judgment with the redactions in paragraphs 22, 26 and 27.
HHJ Russen KC:
A. Introduction
Chucks
Farm").
The Arbitrator was appointed on 8 January 2025 and, in an arbitration whose subject matter is explained below,
Chucks
Farm
was the claimant and Stonegate the respondent.
Chucks
Farm
invited me to consider and dismiss the application for permission to appeal. I decided to direct a hearing of Stonegate's challenge under section 68 and the Claimant's application for leave to appeal (and of
Chucks
Farm's
Respondent's Notice so far as it relates to the issue of leave to appeal). It appeared to me that a hearing on the issue of leave to appeal was required for the purposes of section 69(5) of the Act, particularly when
Chucks
Farm's
position on the section 68 challenge is that the issue of the Implied Term was before the Arbitrator and properly decided by him without him being in breach of duty as alleged by Stonegate on that challenge.
B. Background
Chucks
Farm
(the agreement was also described as being between "Martin Fox t/a
Chucks
Farm
Limited") entered into an egg supply agreement under which
Chucks
Farm
agreed to supply eggs to Stonegate ("the Agreement"). The Agreement provided for
Chucks
Farm
to supply Stonegate with "all eggs produced by the Laying Flocks" at the prices specified by clause 9 and on terms which included an obligation upon
Chucks
Farm
to comply with various industry codes of practice, including "the Code of Practice for Lion Eggs". That is a code of conduct issued by the British Egg Industry Council ("BEIC") to monitor hygiene standards in the egg industry and in respect of which the BEIC upholds a register assigning the Lion Code registration number ("the Lion Code") of any given
farm
(in this case
Chucks
Farm)
to the relevant packer or 'subscriber' (in this case, Stonegate).
Chucks
Farm
about the term (i.e. duration) of the Agreement, specifically whether the Agreement was to expire in January 2024 or whether a variation to the Agreement had been agreed in early 2023 by which
Chucks
Farm
was obliged to supply Stonegate with eggs until 1 October 2025. Stonegate alleged that the Agreement had been validly varied and that
Chucks
Farm's
contractual obligations did not terminate until 1 October 2025.
Chucks
Farm
denied this. Their supply of eggs to Stonegate ceased in January 2024.
Chucks
Farm
issued a claim in Northern Ireland (where their business is based) seeking damages and a mandatory injunction requiring Stonegate to "deliver up the Lion Code forthwith". By this point,
Chucks
Farm
had sought to contract with another subscriber, Morrisons Plc, and therefore wanted to transfer the Lion Code to Morrisons on the BEIC's Lion Code database.
C. The Arbitration
Chucks
Farm
then initiated an arbitration under cl. 12.6 of the Agreement. On 8 January 2025, the Arbitrator was appointed.
Chucks
Farm
claimed damages for the following alleged breaches of contract:
1. failing to agree to release the Claimant's Lion Code;
2. requesting the BEIC not to release their Lion Code;
3. preventingChucks
![]()
Farm
from meaningful trading;
4. harmingChucks
![]()
Farm's
reputation with the BEIC; and
5. preventingChucks
![]()
Farm
from entering into other egg supply contracts with the benefit of Lion Code assurance.
Chucks
Farm's
alleged breach in ending the supply of eggs in January 2024 when Stonegate say the extended contract would have ended in October 2025.
Awards 1, 1b, 1c and 1d
Chuck
Farm's
request, the Arbitrator gave directions for the determination of "the preliminary issue as to whether the Respondents are justified in retaining the Claimant's Lion Code, and if so whether the Lion Code should be released back to the Claimants in advance of [his] dealing with the remaining substantive issues" ("the Preliminary Issue"). Stonegate denied that they were obligated to take any steps in respect of the Lion Code at all, or at least until the Arbitration had resolved the contractual position. Their position was that the BEIC will not release the code to another distributor until such a dispute is resolved.
Chucks
Farm]
their Lion Code as soon as possible and in any event no later than Wednesday 2nd April 2025".
Chucks
Farm's
case in the Arbitration and where there was no term in the Agreement requiring the "return" of the Lion Code either at the end of the Agreement or whilst there was an ongoing dispute about its duration.
Chucks
Farm
then made their own section 57 application on 15 April 2025. By this point, Stonegate had issued an appeal to the High Court in relation to Award 1 (as varied by Award 1c).
Chucks
Farm's
application, the Arbitrator made a further award dated 29 April 2025 discharging Award 1 and its addenda ("Award 1d"). By Award 1d, the Arbitrator accepted Stonegate's case that he had acted ultra vires in making Award 1 (as varied) and he reserved costs of the Preliminary Issue. Stonegate therefore discontinued its appeal.
Award 2 and the Section 57 Decision
1. Was the Agreement varied in or around March 2023?
2. If it was varied, wereChucks
![]()
Farm
in breach of contract and, if so, what were Stonegate's losses?
3. If it was not varied was Stonegate in breach and, if so, what remedies wereChucks
![]()
Farm
entitled to? Were Stonegate justified in not releasing
Chucks
![]()
Farm's
Lion Code?
4. If there was no variation what sum was Stonegate entitled to be repaid?
Chucks
Farm
maintained that Stonegate was obliged to "return the Lion Code". As I return to below, no express term in the Agreement was relied upon by
Chucks
Farm
in their Statement of Case.
" . I find that there is an implied term in the Original Agreement to give it business efficacy that the Lion Code should be released once the supply contract came to an end and the distributor, Stonegate, should not stand in the way of a request to transfer the relevant Lion Code registration to another subscriber as and when their contract withChucks
had come to an end. If I decide there was no extension agreed, then that was on or about the 20 January 2024."
"There was no mention within the contract of what would happen to the Lion Code if the contract was terminated. There was simply a requirement to comply with codes of practice at clause 8, to include the Code of Practice for Lion Eggs, which code sets out the threshold for egg quality and stock welfare."
Chucks
Farm
in respect of sales of eggs to other purchasers after March 2024 at lower prices in the non-Lion Code branded egg market.
"1. The original agreement of 21 September 2020 was not varied by oral agreement on the 21 February 2023 of by letter dated 2 March 2023 or by subsequent conduct.
2. The Original Agreement therefore expired on the depletion of the second full laying flock on or about the 20 January 2024.
3. The respondent is in breach of contract for failing to agree that the Claimant's Lion Code registration be released or otherwise transferred to another distributor in or about February 2024 thus preventing the Claimants from entering into more remunerative contracts with the benefit of Lion Code assurance.
4. The Claimant is entitled to be paid and shall be paid by the Respondent within 14 days the following losses claimed:
a. Underpayments in the period between 2 January 2021 and 20 January 2024 of [REDACTED]
b. Period 1 losses from 20 January 2024 to 18 April 2024 of [REDACTED]
c. Period 2 losses between 1 January 2025 and 30 June 2025 of [REDACTED] (not [REDACTED])
d. Continuing losses until the Lion Code is released or otherwise [REDACTED] per week or pro rata.
5. The Respondent is entitled to be repaid or set off against the above [REDACTED] otherwise the Respondent's Counterclaim fails.
"
Chucks
Farm's
damages claim.
Chucks
Farm's
responded to the section 57 application on 29 July 2025 with a Response headed 'IMPLIED TERM'. By an email dated 15 July, the Arbitrator had informed the parties that he was away until 22 July and had invited any response by that date. The service of
Chucks
Farm's
response on 29 July reflected the fact that Ms Sharon Keeley on their behalf had replied on 17 July saying she was on holiday and the offices closed until 21 July and their counsel was on holiday until 26 July. She asked for an extension until after counsel's return. By an email of 17 July, the Arbitrator responded: "Thanks. If you can let me have your comments by the end of the month if possible."
Chucks
Farm's
response relied upon what was said to be Stonegate's tacit acceptance that once the Agreement was at an end the Lion Code would be released, so "[t]he logical follow on from that is that [Stonegate] has accepted that the release of the Lion Code was already implied into the contract. That that was the case was so obvious as not to require any further clause."
Chucks
Farm
said: "[t]he fact of the implied term that the Lion Code would be released once the contract came to an end was central to the entire case and was so closely tied into the principal facts of the case as to make specific reference to it in the pleadings redundant." Their response referred to the discretion of the Arbitrator under section 34 of the Act in relation to procedural and evidential matters, including (under section 34(g) "whether and to what extent the tribunal should itself take the initiative in ascertaining the fact and law." It also referred to the decision of the Supreme Court in Marks & Spencer Plc v BNP Paribas [2015] UKSC 72 on the test to be applied for implying a term (in fact) on the ground of business necessity.
Chucks
Farm.
They also said:
"Stonegate agrees with the characterisation of the BEIC's position found in paragraph 2(c), namely that: "They [BEIC] conclude that the release of the Lion Code is dependent on the ending of the contract between the parties either by agreement or through the decision of the arbitration". The learned Arbitrator is invited to reflect upon that proposition carefully, as any appeal Court would be invited to."
Chucks'
representatives."
Chuck's
Farm
had said they were not in a position to consent to Stonegate's request for an extension until 5 September 2025.
"Thank you for your emails. I cannot allow this to drift just because counsel is unavailable for weeks. I attach my decision. I have not applied my usual lien but trust you can deal with my account shortly."
"They [Forsters] asked for time to respond. I replied that given the straightforward nature of the references, if In [sic] received a response by 10am on Friday 1 August I would take that into consideration. Forsters then asked on the 31 July for an extension until their counsel returned from holiday in early September. I asked earlier today 1st August whetherChucks
![]()
Farm
had been paid the sums set out in my award and I did not receive a reply. I estimate that no sums have been paid. I do not consider that it is right to delay my determination that long and hence I make it today."
"6. I am asked to clarify a number of points in these paragraphs about my finding that there is this implied term in the Original Agreement that upon request to release it, the Lion Code should be released to another distributor providing the contract with Stonegate had ended. But before doing soChucks
![]()
Farm
reminded me of my general duties under s34 Arbitration Act 1996 giving me a broad discretion over procedural issues, including deciding the extent to which the tribunal take the initiative in ascertaining the facts and the law and that I may take the initiative in ascertaining the facts and the law which I believe I have done to the best of my abilities.
7. It is Stonegate's complaint that the implied term was not pleaded, was not in the skeleton argument, or in the closing address ofChucks
![]()
Farm.
How then could I decide that there was such a term?
Chucks
![]()
Farm
say that the test to apply is the same test as in Marks & Spencer Plc v BNP Paribas (2015) UKSC 72 namely that the term can be implied if it was so obvious that it goes without saying and that the term is necessary to give business efficacy to the contract. In the light of the express terms of the contract, commercial common sense, and on the basis of the facts known to both parties at the time the contract was entered into.
8. An egg producer likeChucks
![]()
Farm
upon signing Stonegate's standard contract would no doubt if asked how long Stonegate could retain his Lion Code would reply that it was so long as he was in contract with Stonegate. As a principle of commercial common sense, Stonegate would and indeed did agree with that statement. Quoting Bowen LJ in The Moorcock (1889) 'It will be found that the law is raising an implication from the presumed intention of the parties with the object of giving the transaction such efficacy as both parties must have intended that in all events it should have'.
9. Whilst the question wasn't put to the parties if either had been asked 'if Stonegate attempted unsuccessfully to extend the contract, depriving the producer of being able to trade elsewhere with the benefit of the Lion Code, would the producer be deprived of any remedy' the answer surely would be of course not, because there was a common understanding between the parties that at the end of the original contract the producer should be entitled to get his Lion Code registration back again to be used by another distributer replacing Stonegate. Further reference was made withinChucks
![]()
Farm
to the statements of the learned judges in Reigate v Union Manufacturing and Shirlaw v Southern Foundries along the same lines as Bowen LJ made in The Moorcock all those years ago.
12. I am asked the following questions
a. With reference to specific paragraph numbers, please identify where inChucks
Statement of Case dated 19 February it is said that such a term should be implied.
Answer: In the Points of Claim ' the contractual duties in relation to the Lion Code are set out in clause 8 of the Agreement in that the Claimant's responsibility is to ensure it complies with the Code of Practice' (para 12) and in the breaches 'Failing to agree to release of the Claimant's Lion Code' (para 16a). Further 'Requesting the BEIC not to release the Claimant's Lion Code' (paragraph 16b).
In the Points of Reply and Counterclaim at paragraph 13a Stonegate say that they are the registered subscriber in relation to the Claimant'sfarm
on the BEIC database and this 'reflects the contractual position'.
It is or ought to be common ground that once a contract is terminated the Lion Code should be transferred to whoever is the next purchaser of the producer's eggs. Stonegate's Responsive submissions on the Preliminary issue at paragraph 34(b)I at p269 of the bundle says 'It is correct and proper that the Lion Code registration remains with the Stonegate (the supplier to which the Claimant is contractually obligated)'. Further in the same document at p269 Stonegate say 'Stonegate's position on the Lion Code is that it is appropriately with the Subscriber who has the contractual entitlement to receive eggs from the registered producer. It would make a mockery of the system if the contractual position did not factor into the Lion Code register in some way'. Ergo if there is no contractual entitlement it must follow that there is no right to retain the Lion Code registration. There is further evidence such as the letter of the 6 February 2023 from Stonegate toChucks
![]()
Farm
at option 1 and 3 (p25) release the Lion code once 'our trade comes to an end' and Mr Gotts evidence in cross examination if there is no contract there is no right to retain the Lion Code.
There is otherwise no error requiring correction, ambiguity or clarification within the scope of s57(3)a.
b. With reference to specific paragraph numbers please identify where inChuck's
skeleton argument the Arbitrator considers that
i. The relevant law regarding implied terms is traversed, and
ii.Chucks
submits that a term as per paragraph 58 of the Award should be implied into the Original Agreement.
Answer: I have interpreted the facts and the law as best I can and I don't consider that the skeleton argument is relevant to this application. There is no error requiring correction, ambiguity or clarification within the scope of s57(3)a.
c. Does the learned Arbitrator consider thatChucks
![]()
Farm's
oral submissions addressed any implied term? If so, what was said and when?
Answer: I have interpreted the facts and the law as best I can and I don't consider that the submissions are relevant to this application. There is no error requiring correction, ambiguity or clarification within the scope of s57(3)a.
d. Please explain why Stonegate's counsel was not asked to address the Arbitrator in relation to the implied term.
The Arbitrator relies upon the pleaded case, the admissions made by Stonegate as to when the Lion Code should be released, and common commercial interpretation of Stonegate's own contract. It is quite obvious that there is an implied term that they cannot simply refuse any request to release the Lion Code at the end of their contractual relationship with the Claimant simply because they deem that they have a dispute. I have interpreted the facts and the law as best I can, and I don't consider that whether Stonegate's counsel has addressed me on not is relevant to this application. There is no error requiring correction, ambiguity or clarification within the scope of s57(3)a."
D. Stonegate's Challenge and
Chucks
Farm's
Response
Chucks
Farm
would have failed in the Arbitration.
Chuck
Farm's
case on the point, and that this was the cause of substantial injustice in the form of the award of damages and costs against Stonegate. The Claim Form seeks an order that Award 2 be set aside in its entirety or else remitted to the Arbitrator for reconsideration (see section 68(3) of the Act). However, Mr Varma and Ms Baker on behalf of Stonegate made it clear at the hearing that the relief sought was an order under section 68(3)(a) remitting Award 2, in part, to the Arbitrator for reconsideration.
"Did the Agreement include an implied term which obliged Stonegate not to "stand in the way" of a request to transfer the relevant Lion Code registration regardless of any dispute as to the contractual position?"
Chucks
Farm
deny there was any serious irregularity affecting Award 2. Their position is that the Implied Term was very much "in play" (to use the expression adopted in the authorities addressed below) so there was no breach of the duty under section 33(1)(a) of the Act. Mr Greenwood on their behalf referred to the relatively low threshold applied by the court when determining whether a point was "in play". In the alternative, they say that, even if there was a breach, it did not give rise to a substantial injustice. On this aspect, Mr Greenwood highlighted what the authorities described as the high hurdle faced by a party pursuing a case under section 68 on the basis that there has been a serious irregularity causing substantial injustice.
Chucks
Farm
invites the court to uphold Award 2 for the following additional reasons:
(1) Stonegate have not sought to establish the question posed by their appeal was a question of law the Arbitrator was asked to determine, so that such that the requirement in section 69(3)(b) of the Act is not satisfied; and
(2) Even if the Arbitrator had been asked to determine that question, the answer to that question does not affect the outcome of the Arbitration, given he did not order the Appellant to release the Lion Code.
E. Stonegate's Section 68 Challenge: Analysis and Decision
Legal Principles
"20. Where the challenge is made under section 68(2)(a), the seriousness of the irregularity must be judged in accordance with the fundamental principles laid down in a series of cases which ante-date the 1996 Act, but which have been repeatedly upheld as reflecting the principles enshrined in section 68(2)(a):
21. Thus, Ackner LJ in The Vimeira [1984] 2 Lloyd's Rep 66, 76) stated:
"The essential function of an arbitrator is to resolve the issues raised by the parties. The pleadings record what those issues are thought to be and, at the conclusion of the evidence, it should be apparent what issues still remain live issues. If an arbitrator considers that the parties or their experts have missed the real point then it is not only a matter of obvious prudence, but the arbitrator is obliged, in common fairness or, as it is sometimes described, as a matter of natural justice, to put the point to them so that they have an opportunity of dealing with it
the adequacy of the turning area was not at the conclusion of the evidence - even though it was a possible issue at the commencement of the arbitration - any longer a live issue. The arbitrators clearly thought otherwise. They should have so informed the parties "
and (per Bingham LJ) in Zermalt Holdings SA v Nu Life Upholstery Repairs Ltd [1985] 2 EGLR 14 at 15:
"If an arbitrator is impressed by a point that has never been raised by either side then it is his duty to put it to them so that they have an opportunity to comment. If he feels that the proper approach is one that has not been explored or advanced in evidence or submission, then again it is his duty to give the parties a chance to comment. If he is to any extent relying on his own personal experience in a specific way, then that again is something that he should mention so that it can be explored. It is not right that his decision should be based on specific matters which the parties never had the chance to deal with, nor is it right that a party should first learn of adverse points in a decision against him. That is contrary both to the substance of justice and to its appearance .."
22. These principles apply to unargued points of law or construction as they do to unargued questions of fact. In such cases, whilst it is not necessary for the tribunal to refer back to the parties each and every legal inference which it intends to draw from the primary facts on the issues placed before it, the tribunal must give the parties "a fair opportunity to address its arguments on all of the essential building blocks in the tribunal's conclusion" (ABB AG v Hochtief Airport [2006] 2 Lloyd's Rep 1, paragraph 70)"
"In truth, we are simply talking about fairness. It is not fair to decide a case against a party on an issue which has never been raised in the case without drawing the point to his attention so that he may have an opportunity of dealing with it, either by calling further evidence or by addressing argument on the facts or the law to the tribunal."
Chucks
Farm,
Mr Greenwood referred to a number of authorities which address what is meant by a new point triggering the need (under section 33(1)(a)) for each party to be given a "reasonable opportunity" to address it, as opposed to a point that was "in play" in the arbitration and, therefore, a point which, being in play, cannot be said to have involved the tribunal denying either party that opportunity. If the point was sufficiently in play then the court should analyse the position as one of a reasonable opportunity missed by the section 68 claimant rather than as one wrongly denied to it by the tribunal in breach of section 33.
"However where a point of construction is squarely in play and addressed by both parties, the tribunal is not obliged to put to the parties all aspects of the analysis in support of its conclusion in order to fulfil the s. 33 duty of fairness. As is well known, construction is an iterative process involving consideration of the particular wording in question, the other provisions of the contract taken as a whole, and the commercial consequences which follow from the rival constructions. The relevant provisions may be lengthy and admit of many nuances in the analytical argument. If provisions are relevant, and have been adverted to and addressed in argument, it is not necessarily unfair for the tribunal to use them to support its reasoning, even where the other party has not done so in the same way as the tribunal. It is always important to keep in mind the distinction between a lack of opportunity to deal with a case and a failure to recognise or take such opportunity. It is commonplace in judicial decisions on points of construction that a judge may fashion his or her reasoning and analysis from the material upon which argument has been addressed without it necessarily being in terms which reflect those fully expressed by the winning party. There is not perceived to be, and is not, anything which is unfair in taking such a course. It is enough if the point is "in play" or "in the arena" in the proceedings, even if it is not precisely articulated. To use the language of Tomlinson J, as he then was, in ABB AG v Hochtief Airport [2006] 2 Lloyd's Rep 1 at [72], a party will usually have had a sufficient opportunity if the "essential building blocks" of the tribunal's analysis and reasoning were in play in relation to an issue, even where the argument was not articulated in the way adopted by the tribunal. Ultimately the question which arises under s. 33(a), whether there has been a reasonable opportunity to present or meet a case, is one of fairness and will always be one of fact and degree which is sensitive to the specific circumstances of each individual case. That applies to points of construction as much as to other points in dispute."
"In my view the authorities have been right to place a high hurdle in the way of a party to an arbitration seeking to set aside an award or its remission by reference to section 68 and in particular by reference to section 33. Losers often think that injustice has been perpetrated when their factual case has not been accepted. It could be said to be "unjust" if arbitrators get the law wrong but if there is no appeal to the court because the parties have agreed to exclude the court, the decision is one they must accept. It would be a retrograde step to allow appeals on fact or law from the decisions of arbitrators to come in by the side door of an application under section 33 and section 68."
Chucks
Farm
cited in his skeleton argument a number of cases, in addition to ABB AG and The Magdalena Oldendorff, to support the proposition that a section 68 challenge based on a breach of section 33 should not be treated as a soft option alternative to an unpromising application for leave to appeal under section 69 of the Act but instead as a long-stop to deal with extreme cases where something went seriously wrong with the arbitral process, with the resulting injustice going beyond what can reasonably be expected as an ordinary incident of arbitration.
"46. As Christopher Clarke J observed, paragraph 280 of the Departmental Advisory Committee Report on the Arbitration Bill has been referred to often in this context. It is unnecessary to set it out again. What it emphasises is that what became section 68 was intended for cases where it could be said that what had happened was so far removed from what could reasonably be expected of the arbitral process that the court could be expected to take action. It was "really designed as a longstop, only available in extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected." See especially Lord Steyn in Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, [2006] 1 AC 221, at [28] ("Plainly a high threshold must be satisfied."). The approach set out in paragraph 280 of the DAC Report has been specifically adopted in this court: Warborough Investments Ltd v S. Robinson & Sons Ltd [2003] EWCA Civ 751, at [59], per Jonathan Parker LJ, applying Checkpoint v Strathclyde Pension Fund [2003] EWCA Civ 84, (2003) 14 EG 124, at [59] per Ward LJ.
47. I doubt if reference to pre-1996 Act cases on misconduct or technical misconduct or procedural mishap (such as Interbulk v Aiden Shipping (The Vimeira) (No 1) [1984] 2 Lloyd's Rep 66) is today helpful. Today the question is whether the tribunal has given the parties a fair opportunity of addressing them on all issues material to their intended decision, or whether there has been a denial of a fair hearing. This will no doubt be a rare case: for an example, see Cameroon Airlines v Transnet Limited [2004] EWHC 1829 (Comm). Section 68 is not to be used simply because one of the parties is dissatisfied with the result."
Application of the principles to this case
Chuck's
Farm
had asserted the existence of an implied term was in their Section 57 response dated 29 July 2025. They said that the one working day allowed by the Arbitrator (by his email sent at 17:56 on 30 July) to engage with that response did not provide Stonegate with a reasonable opportunity to address the point. In fact, given what Forsters then said in their email of 31 July (20:43) about the unavailability of their leading and junior counsel during that short period (the reasons being other professional commitments and parental leave respectively), it was no opportunity at all. Stonegate were not responsible for the "drift" (and delay) mentioned by the Arbitrator in his email of 1 August 2025, enclosing the Section 57 Decision. It was
Chucks
Farm
who had requested further time in July 2025 to respond to Stonegate's section 57 application and who had been given to the end of the month.
Chucks
Farm,
Mr Greenwood said the Implied Term was "in play" in the arbitration, in the sense described by Popplewell J in Reliance Industries, and no injustice to Stonegate was involved in Award 2 and the Section 57 Decision. He referred to
Chucks
Farm's
Statement of Case dated 19 February 2025 which (at paragraph 12) alleged that the Agreement did "not permit retention of the Lion Code in the event of breach of contract" and (at paragraph 16(a)) alleged a breach of contract by Stonegate in "failing to agree the release of the Claimant's Lion Code". Damages for "restraint of trade and breach of contract" were claimed. Stonegate having by their Points of Reply and Counterclaim dated 11 April 2025 (at paragraph 17) having said "the Respondent cannot be in breach of a non-existent term",
Chucks
Farm's
Response and Reply to Counterclaim said this (at paragraph 9):
"The Claimant takes issue with the Respondent's Points of Reply in paragraph 17. It was assumed that it was obvious from the Statement of Case how the Respondent was in breach of contract. The Respondent was obliged to release the Lion Code at the conclusion of the contract between the parties. This was accepted by the Respondent in its letter to the Claimant of the 6th February 2023 where the Respondent stated that:
"You provide Stonegate with 6 months' notice, you continue to supply us with eggs during this term at current prices, and then we shall release your lion code. Our trade comes to an end."
For the sake of clarity once the contract between the parties was at an end the Respondent should have released the Claimant's Lion Code to allow any other subscriber to register it in their name. The Respondent failed to do so leading to the breach of contract alleged."
Chucks
Farm's
Response was the clearest expression of their case on Stonegate's alleged breach of contract before the publication of Award 2. In his Section 57 Decision the Arbitrator referred to Stonegate's letter dated 6 February 2023 (at paragraph 12(i)) and he was clearly persuaded by paragraph 9 of
Chuck's
Farm's
Response because he said (at paragraph 8):
"An egg producer likeChucks
![]()
Farm
upon signing Stonegate's standard contract would no doubt if asked how long Stonegate could retain his Lion Code would reply that it was so long as he was in contract with Stonegate. As a principle of commercial common sense, Stonegate would and indeed did agree with that statement."
Chucks
Farm
expressed their case and the chronology of events in the arbitration (in particular the after-the-event justification of the Implied Term in the Section 57 Decision) it is clear that the Implied Term, or any implied term of the Agreement, was not "in play" in argument between the parties before the Arbitrator decided to articulate it and act upon it in Award 2.
Chucks
Farm's
statement of case the initial building block (as a start for the point being in play) of a clearly formulated implied term, whether that be the Implied Term as found by the Arbitrator or some other term supporting a claim for damages of the kind awarded. I have quoted above from paragraph 16 of
Chucks
Farm's
Statement of Case and the allegation of a breach of contract by Stonegate in "failing to agree" the release of the Lion Code. Conventionally, an allegation of breach of contract proceeds on the basis that a party has already agreed to do something (either expressly or impliedly) and has broken that past promise. Although
Chucks
Farm's
Response assumed it was obvious how Stonegate were in breach of contract, that was not the case, at least not so far as identification of a contractual term to support such a breach was concerned.
Chucks
Farm
have never in their statements of case formulated an implied term, to be read into the Agreement with effect from 21 September 2020, that would support a claim for damages against Stonegate in the event of them failing to establish the Agreement continued beyond January 2024.
Chucks
Farm's
case proceeded on the basis that the Lion Code was their property. The "event of [a] breach of contract" referred to in paragraph 12 of the Statement of Case was referring to any breach by
Chucks
Farm;
and their case that, even if they were in breach the Agreement by terminating the supply of eggs before October 2025 (as Stonegate claimed), Stonegate were not entitled to retain their (
Chucks
Farm's)
Lion Code. That was the basis on which the Arbitrator made Award 1 (for the "return to [
Chucks
Farm
of] their Lion Code" (my emphasis)); and it was his later acceptance, by Award 1d, that the Lion Code was "not within Stonegate's possession" but "could only be released by the BEIC" that led to the awards of pre-emptive injunctive relief being set aside on the basis that he had acted ultra vires.
farm
must have the Lion Code for that producer"), there was no mention of an implied term at that hearing. It is clear from the passages relied upon by Mr Greenwood (pages 139 to 141 of the transcript) that the Arbitrator was not there referring to a contractual term that might support a claim in damages but was instead clarifying Stonegate's recognition that any subscriber in a contractual relationship with the laying
farm
must also have the Lion Code for that producer. That is clear from the Arbitrator's reference (by page number in the bundle before him) to paragraph 30 of Stonegate's responsive submissions on the Preliminary Issue, where they went on to say that a failure to do so would be "a breach of the BEIC Code of Conduct and [is] a C4 Fundamental Critical Breach." Mr Gott confirmed that was Stonegate's position. Mr Varma said that because Stonegate recognised that, there would be no need to grant injunctive relief in the event of Stonegate losing on the issue of a contractual extension.
Chucks
Farm's
subscriber had to have the Lion Code carried with it a liability in damages if it was later determined that Stonegate had not been that subscriber from a certain date, but Mr Varma could not have been clearer in his submission to the Arbitrator that there was no contractual basis for such liability (or indeed to grant an injunction). His submissions on this point (pages 146 to 147) included the following:
"What you cannot do is grant remedies for breach of non-existent terms. And the onus is on the party alleging breach again, at the risk of stating the obvious, to identify the obligation that has been breached and where it can be found, and that is just not done. It is not in any pleading. It is not in any skeleton argument. It is no part of the evidence that has been provided by Mr Fox, which is that the only agreement he entered into with Stonegate is the agreement that he entered into in 2020. That's the end of it."
Chucks
Farm
in support of the Implied Term "have never previously been referred to in this arbitration" and they concluded by saying "[w]e trust the learned Arbitrator will answer those queries [i.e. those raised by the section 57 application] with his duties under section 33 in mind."
Chucks
Farm's
section 57 response. His email of 30 July (17:56) invited Stonegate's submissions to the paragraph in
Chucks
Farm's
response which referred to certain authorities in implied terms (principally Marks & Spencer v BNP Paribas [2015] UKSC 72). Yet he allowed Stonegate only one working day to do so, having on 17 July agreed to
Chucks
Farm's
request for more time beyond 22 July that they could have a fortnight for their response (even though, in the event, they did not need to go beyond the date of 29 July following their counsel's return from holiday). Whether or not he knew it on 17 July, when allowing
Chucks
Farm
their extension, it is clear from the Arbitrator's email of 30 July (17:56) that, by the end of the month when time
Chucks
Farm's
response was due, he knew he would be departing for a 3 week holiday on Saturday 2 August. That was the reason why he requested Stonegate's response by 10am on 1 August.
Chuck's
Farm
indicated they could not consent to that request and (whilst not directly answering the question in the Arbitrator's email of 1 August) referred to
Chucks
Farm's
"severe financial hardship and ongoing stress". I clarified with Mr Greenwood during the course of his submissions that it was implicit in what the Arbitrator said that, if Stonegate had paid the damages awarded by Award 2, they might well have been given more time for their reply. Yet Stonegate wanted to reply with a view to questioning the very basis of the damages award; and any further "drift" (as the Arbitrator put it in his email) would be at Stonegate's expense if the Arbitrator was not persuaded by Stonegate's submissions. I do not know (and I assume neither did the Arbitrator) whether on 1 August 2025 Stonegate were financially able to promptly meet the "expense" already incurred under the questioned Award. I should not assume they were not able to pay, but, in the circumstances, Stonegate were entitled to question the basis of it.
Chucks
Farm
had said (on 29 July, for the first time) about the basis for the Implied Term then (as Forsters' email of 30 July (16:10) had flagged) they would have inevitably reminded the Arbitrator of the parties' rival submissions respectively made at the hearing on 10 June 2025 and this would have involved Stonegate making the points summarised by me above by reference to the transcript. What the Arbitrator might then have decided is more appropriately considered in the context of the "substantial injustice" test.
Chucks
Farm's
replacement 'subscriber'). By Award 1d, setting aside the grant of injunctive relief, the Arbitrator said: "
instead any final determination of the contractual issues by me will act as the litmus test for the BEIC to determine then who might have the Lion Code applicable to
Chucks
Farm.
That does not mean that I accept the argument put by Stonegate that the BEIC procedure to handle delisting disputes should have been utilised instead of arbitration
" (my emphasis in underlining). That way of expressing things, when considered against the Arbitrator's rejection of the property-based assumption behind paragraph 12 of the
Chucks
Farm's
Statement of Case, seems to me to be very arguably at odds with the Implied Term which operates to attach the "price" of a retrospective award of damages in the event of Stonegate engaging with the contractually ordained arbitral process over the duration of the Agreement and then losing on that issue.
Chucks
Farm's
response to their section 57 application may well have gained traction with him. I say that noting, as Mr Varma pointed out, the existence of the Section 57 Decision provides considerable insight into his analysis of the Implied Term without having had the benefit of those arguments.
Chucks
Farm's
reliance upon Stonegate's recognition that that Agreement must in some way "factor in" the Lion Code and that registration of the Lion Code should be with the subscriber who has the contractual entitlement to receive eggs from
Chucks
Farm.
As the Arbitrator put it: "Ergo if there is no contractual entitlement it must follow that there is no right to retain the Lion Code registration" (my emphasis). The assumption in
Chucks
Farm's
case (one at all times until their section 57 response based on a proprietary interest rather than a clearly formulated contractual obligation upon Stonegate) is that a later decision that there was no such entitlement from a certain date in the past carries with it an exposure for Stonegate to a damages claim from that past date.
Chucks
Farm
to comply with the BEIC's Code of Practice. The BEIC controls transfers between subscribers of any Lion Code registration on its database. Mr Varma referred to the BEIC's Code of Practice dated 17 October 2024 which in section 1 ('Background') contains a passage beginning: "Unfortunately, there has been an increasing number of contractual disputes concerning which subscriber is entitled to receive egg from a Producer." The BEIC stated it did not wish to take sides in such disputes and referred to the "Existing Procedure" under which subscribers were expected to mediate and the "Revised Procedure" which would involve a determination by a barrister as to who should hold the Lion Code registration. The BEIC will, if necessary, amend the database to reflect the barrister's decision but "[i]f either subscriber does not agree with the barrister's decision they may still pursue legal action or explore other alternative dispute resolution."
Chucks
Farm
and Stonegate over the Lion Code registration was a matter for him in the alternative dispute resolution process of the arbitration, rather than a matter to be addressed through the BEIC procedure as suggested by Stonegate. However, the language he used in that award prompts the question as to whether (under an Agreement which expressly incorporates the BEIC's Code of Practice) there is scope for an implied term which creates a damages liability for a party to the dispute before the dispute is resolved (howsoever it is resolved).
Decision
F. Stonegate's Section 69 Application for Permission to Appeal: Decision
Chucks
Farm's
primary position on Stonegate's claim which meant it was sensible to hear the application for leave to appeal at the same time as the section 68 claim. Although counsel's oral submissions at the hearing were principally directed to the section 68 challenge, they referred me to their detailed rival skeleton arguments on the application for leave to appeal.
Chucks
Farm's
skeleton argument (and Respondent's Notice) made the point that on Stonegate's primary case, in support of that challenge, Stonegate could not satisfy the pre-condition in section 69(3)(b) for the grant of leave to appeal; namely that the court is satisfied that the question of law (i.e. the issue of the Implied Term) is one the Arbitrator was asked to determine.
G. Disposal
Chucks
Farm's damages claim and the issue of costs. Any further terms to be attached to the remitter, if any, will be a matter for further determination by me having heard the parties on that and any other consequential matters upon which they are not agreed. I invite the parties to submit a draft minute of order reflecting this judgment and identifying any such matters which remain in issue.